Minimum Wage and HR Practices: The Perspective and Implications for the Malaysian Hotel Industry

Author: Idaya Husna Mohd

Mohd, Idaya Husna, 2014 Minimum Wage and HR Practices: The Perspective and Implications for the Malaysian Hotel Industry, Flinders University, Flinders Business School

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This thesis explored the implications on Human Resource practices of the introduction of a National Minimum Wage (NMW) with specific reference to the Malaysian hotel sector. The composition of HR practices within Malaysia (especially the wage scheme in the Malaysian hotel industry) differs from other countries in the world. The introduction of a NMW brought in debate on how the industry would cope with the anticipated implications especially on the wage scheme. As wages are usually left for the market to determine, the NMW would cause changes within organizations, especially with regards to HR practices. As the wage scheme composition changes will involve increases in cost, the impact is predicted to hit HR practices as a whole. Consequently the changes in HR practices are predicted to impact upon employees' productivity and motivation. A series of survey and semi-structured in-depth interviews were conducted prior to the legislation of the NMW as a national policy to investigate employers' anticipated responses, preparedness and changes in HR practices in implementing the NMW in the hotel industry. This study also investigated the overall readiness of employers in implementing the new wage policy. A survey was then conducted with hotel employees to explore their responses to the NMW, to assess the potential impact on their productivity, and to examine the impact of HR practices on employee motivation. Although the findings indicated that both employers and employees agreed with the new wage policy, as the knowledge on the new NMW and the associated wage structure is limited, they may not actually be ready to cope with these changes. The findings also indicated that employers chose the 'high road' strategy to cope with the changes brought by the new wage policy. The NMW was not found to be the only driver towards motivation; work life balance also appears to drive employee motivation, suggesting that both extrinsic and intrinsic values must be considered in terms of employee motivation. This thesis makes a significant contribution towards assisting the key players in the hotel industry (policy makers, hotel associations, trade unions, employers and employees) to develop a more strategic and effective approach to the implementation of the NMW.

Keywords: minimum wage,hotel industry,Malaysia,Human Resource Management

Subject: Business thesis

Thesis type: Doctor of Philosophy
Completed: 2014
School: Flinders Business School
Supervisor: Dr Marian Whitaker